All too often, the rich and powerful use their influence to manipulate the tax code and pass budgets that serve their interests at the expense of working people. They get greedy politicians to introduce tax bills as “tax reform,” but these bills aren’t about reforming our tax laws, they’re about giving more tax breaks to Wall Street, big corporations and millionaires and sticking working people with the bill.

Trillions of dollars are diverted to CEOs and Wall Street executives and companies that outsource jobs to other countries instead of being used for the public good, like fixing our crumbling bridges and schools, strengthening our public education system and improving our nation’s infrastructure.

Real tax reform should close the loopholes that give massive tax breaks to companies that outsource jobs and profits, and would ask millionaires and Wall Street to pay their fair share for once. That would allow us to make the kind of investments we need to create good jobs for working people now and in the future, while still being able to fund the critically important programs--like Social Security, Medicare and Medicaid--that protect our nation's vulnerable.

The labor movement fights for the kind of tax and budget policies that meets the needs of working people, and fights against the ones that just lines the pockets of the wealthy and powerful.

Did the GOP Bill Simplify the Tax Code?

No. Donald Trump and congressional Republicans rushed to pass the 2017 Tax Act in December 2017, leaving very little time for public hearings, or careful drafting, or meaningful public debate. In March 2018, a leading tax expert concluded that the bill’s new rules for pass-through businesses "achieved a rare and unenviable trifecta, by making the tax system less efficient, less fair and more complicated. It lacked any coherent (or even clearly articulated) underlying principle, was shoddily executed, and ought to be promptly repealed."

Are Corporate Tax Cuts Trickling Down to Working People?

No. Americans for Tax Fairness calculates that corporations are receiving nine times as much in tax cuts as they are giving to workers in one-time bonuses and wage increases, and only 4.3% of workers are getting a one-time bonus or wage increase this year. Americans for Tax Fairness calculates that 183 private sector businesses have announced 94,296 layoffs since Congress passed the tax bill.

Rather, corporations are keeping the windfall. Americans for Tax Fairness calculates that corporations are spending 37 times as much on stock buybacks, which overwhelmingly benefit the wealthy, as on one-time bonuses or wage hikes.

And the rate of corporate investment growth has stayed pretty much the same as before the GOP tax bill passed.

Are U.S. Corporations Taxed Too Much?

No. Thanks to the GOP tax bill, corporate tax revenue (as a share of the economy) will be lower in the United States than in any other developed country, according to a recent report by the Institute on Taxation and Economic Policy. That translates into less of the public investment we need in education, infrastructure, and meeting the needs of children, families, seniors and communities.

Do Tax Cuts for Big Corporations and the Wealthy Pay For Themselves?

No. The budget proposal submitted by the administration in February already conceded that the GOP tax cuts will not pay for themselves. According to an April 2018 report by the non-partisan Congressional Budget Office, the GOP tax bill will cost the United States more than we thought -- $1.9 trillion by 2028. And we know some Republicans will call for cuts to Medicare, Medicaid and Social Security to make up for the lost tax revenue.

Should the Temporary Tax Cuts for Individuals Be Extended?

No. The GOP tax bill includes temporary tax cuts for individuals that are set to expire by 2025, and now some Republicans are proposing to extend them. Extending the individual tax cuts would disproportionately benefit the wealthy: an April 2018 report by the Institute on Taxation and Economic Policy (ITEP) shows that 61% of the benefit from these individual tax cuts would go to the richest one-fifth of taxpayers. Extending these tax cuts for wealthy individuals would also balloon the price tag of the GOP bill, which has never been popular. In fact, only 27% of Americans think it was a good idea.

How Can the GOP Tax Act Be Fixed So It Doesn’t Incentivize Outsourcing?

An April 2018 report by the non-partisan Congressional Budget Office confirms that two "provisions [of the GOP tax bill] may increase corporations’ incentive to locate tangible assets abroad.

In February 2018, Sen. Whitehouse (D-R.I.) and Rep. Doggett (D-Texas) introduced the No Tax Breaks for Outsourcing Act, which would eliminate the GOP tax bill’s incentives for outsourcing by equalizing tax rates on domestic profits and offshore profits.

More specifically, the bill would:

Tax offshore profits at the same 21% rate that applies to domestic profits.

Repeal the bill’s tax exemption for a 10% return on tangible investments (such as plants and equipment) made offshore.

Crack down on “corporate inversions” and make it harder for U.S. corporations to avoid U.S. taxes by becoming foreign corporations.

Combat “earnings stripping” and prevent multinational corporations from avoiding U.S. taxes by deducting an excessive amount of interest paid to their offshore subsidiaries.